China and EU’s wisdom in choosing competition soft law or hard law in the digital era: a perfect match?

The development of digital technologies has led to the emergence of new business models benefiting consumers in their searching, shopping and communicating activities. However, it also challenges the applicable competition law framework and enforcement. Although there seems to be a global consensus on the need to update competition law, the EU and China have chosen different regulatory tools—hard law and soft law, respectively—to address the new and complex challenges facing the competition governance of digital markets. This paper aims to explore why the EU opted for hard law while China opted for soft law, and to further examine whether the selected regulatory tool is the most appropriate in the specific context. By analyzing and comparing characteristics of the digital market and competition institutions’ powers in the EU and China, the paper concludes firstly, that, through the use of hard law, the EU is able protect the Internal Market and at the same time overcome the inflexibility of hard law by adding review articles. Secondly, the paper concludes that, through the use of soft law, China is able to take advantage of soft law to rapidly respond to public attention in the digital market and, at the same time, overcome the non-legally binding force of soft law by strengthening the power of its competition authority.


Introduction
Over the past decades, the information and communication technology (ICT) sector has undergone rapid development, from microelectronics in the 1940s, to the birth of the computer in the 60 s, and the introduction of the internet in the 90 s. 1 A new economy enabled by digital technologies has emerged, 2 such as E-Commerce, Fintech, Artificial Intelligence (AI) and robotics. Specifically, digitalization has opened vast prospects for business innovation, which helps to create new models and opportunities for business as well as more innovation for products and services. Moreover, the COVID-19 pandemic has accelerated digitalization processes. More and more people have continued, to the extent possible, with their activities through online channels for working, studying, communication, selling and buying, or entertainment. 3 Despite the many benefits that digital innovation has brought, however, much of the enthusiasm and idealism that were so characteristic of the early years of the Internet has given way to concerns and skepticism. 4 One of the principal concerns of economic regulation in the era of digital economy is to facilitate fair competition in markets. 5 Part of this concern is a fear that the digital sector will naturally favor the growth of hugely influential platforms and ecosystems that will dominate the economy and use their power to extend their influence on social and political issues. 6 Competition law is aimed at maintaining the competitive dynamics also in the digital economy and has brought concrete and important changes for market players and consumers. 7 Nevertheless, although competition doctrine and theory traditionally have prided themselves on being attuned to economic realities, they have lagged behind these rapid changes in the economic landscape. 8 Only within the last few years have economists and legal scholars started working to develop a methodology for identifying the competitive injuries that platform-based environments enable. 9 It is possible to summarize those challenges for competition law into two aspects-the legal framework and law enforcement.
There is a gap between the current competition legal framework and the development of digital markets. A growing body of literature suggests that many concepts and tools derived from traditional business models do not generally apply to digital companies, as online platforms have complex business models and arrangements. 10 The existing regulatory toolkit may not be enough to scrutinize data-driven algorithmic models. 11 For instance, secondary heuristics such as the competition regulator's basic distinction between horizontal and vertical integration strategies do not translate well to the platform-based environment. Thus, the adoption of new regulations and tools can complement the current competition legal framework. 12 On the other hand, the development of the digital economy also brings challenges to competition law enforcement. Officials from the United States, UK, France and Germany have publicly recognized the potential harm and question the adequacy of their current enforcement tools. The complexity and opacity of platform-based, massively intermediated exchange structures have stymied courts and policymakers used to working with more traditional economic models. 13 The ability to intervene quickly is recognized as an absolute necessity in digital markets. 14 Generally, there are two basic regulatory tools: hard law and soft law. Most modern legal regimes adopt a conscious hybrid system in competition law with a mix of hard and soft instruments, to pursue the same objective. 15 Several states and regions have realized the significance of updating competition law in the digital era. But finding a balanced and optimized governance approach is not going to be easy, as the issues at hand are complex. 16 Some competition agencies now routinely issue guidelines and staff interpretations to signal regulated entities about their interpretations 9 Ibid. 10 Kira B, (2019). 'Competition Policy in the Global Connected Economy: A Promising Research Agenda'. De Lege Ferenda. 2. 11 Graef I, (2020). 'Effective enforcement matters more than new rules in the EU's efforts to regulate gatekeeping platforms'. Available from: https:// proma rket. org/ 2020/ 10/ 11/ effec tive-enfor cement-ruleseu-regul ate-gatek eeping-platf orms/.
See also : Trubek D, Cottrell P, and Mark Nance M, (2005). "Soft Law," "Hard Law," and European Integration: Toward a Theory of Hybridity. Jean Monnet Working Paper 02/05. 31. Available from: https:// ssrn. com/ abstr act= 855447. 16 United Nations Conference on Trade and Development, supra note 3, at 4. of governing status and rules and their likely enforcement stances. 17 However, several states and regions have chosen to apply hard law in Big Tech competition. 18 The EU and China have chosen different tools for regulating competition in digital markets. The EU published and proposed two hard law instruments-Regulation on Promoting Fair and Transparency for Business Users of Online Intermediation Services (P2B Regulation) on 11 July 2019 to promote fairness and transparency for business users of online intermediation services, and the Digital Market Act (DMA) on 1 November 2022 to promote contestable and fair markets in the digital sector by targeting "gatekeepers" which have become an important gateway for business users to reach end users due to strong positive network effects and economies of scale. 19 China published instead a soft law instrument named Anti-Monopoly Guidelines for the Platform Economy (Platform Guidelines) in February 2021 to strengthen antitrust enforcement in the Internet platform sector and to provide guidance for tech companies. 20 In light of these developments, the purpose of this paper is to answer the two questions: first, why the EU and China have chosen different regulatory tools -hard or soft law, to regulate competition in the digital market; secondly whether the selected regulatory tool is the most appropriate in the specific context. It is structured in five parts. Part 2 compares, in general, soft law and hard law to understand their advantages and disadvantages. Part 3 discusses why the EU chose hard law and China chose soft law to regulate the digital market. Part 4 compares two jurisdictions to understand their choice of regulatory tools further. Then the last part gives some conclusions.

Differences between hard and soft law
Soft law instruments are part of a reality that is difficult to ignore nowadays, as hybrid modes of regulation that combine soft and hard law instruments are put in place in many sectors, 21 including competition. 22 King & Wood Mallesons, (2020). 10 Highlights of the Antitrust Guidelines for Platform Economy. Available from: https:// www. china lawin sight. com/ 2020/ 11/ artic les/ compl iance/ 10-highl ights-of-the-antit rust-guide lines-forpl atform-econo my/ [https:// perma. cc/ ZJ2Z-YZQD]. 21 Trubek D, and Trubek L, (2007) the EU competition domain is defined by the hybridity of (legal and non-legal) instruments the Union issues, whereby 'soft law adds further precision to the general rules provided for in the Treaty, thus specifying and concretizing the law'. 23 Nevertheless, soft law comes in an "infinite variety", 24 which presents a challenge for any attempt at defining, classifying, or developing a framework of analysis. 25 Soft law is an oft-used concept, which is still given different meanings as no consensus has emerged in scholarship. 26 The most quoted academic definition of soft law is by Snyder, who defines soft law as "rules of conduct which, in principle, have no legally binding force but which nevertheless may have practical effects and also legal effects". 27 This section continues by summarizing three advantages, two debated issues and a disadvantage of soft law as regulatory tool.

Three advantages of soft law
Soft law might be preferable to hard law in some circumstances. Trubek et al. classified seven general explanations for why soft law might be preferable to hard law. 28 Based on their conclusions, we summarize three rather uncontroversial advantages of soft law, which are to some extent overlapping.
(1) Lower negotiation costs. A major advantage of soft forms of governance is their lower negotiation or "contracting" costs, especially when the issues are unfamiliar or complex. 29 Compared to hard law, soft law can reduce the levels of obligation, delegation and precision, making cooperative agreements possible.
(2) Flexibility. The extensive use of soft law can be seen as a reaction to the need for a more flexible regulatory system. 30 Firstly, the greater flexibility of soft law allows for renegotiation or modification as circumstances evolve over time. 31 Soft law is well equipped to cope with new problems by providing the flexibility 23 Stefan O, (2012 Abbott K and Snidal D, (2000). 'Hard and Soft Law in International Governance'. International Organization Vol. 54,Legalization and World Politics. 434. 30 Cosma H and Whish R, (2003). 'Soft Law in the Field of EU Competition Policy'. Vol. 14(1) European Business Law Review, 33. 31 Snyder, supra note 15.
See also: Trubek, Cottrell, and Nance, supra note 15, at 15. necessary to allow for the possibility of required reform that can accommodate diverse legal systems. 32 Secondly, soft law can take divergent circumstances into account through flexible implementation, which in turn helps to deal with the domestic political and economic consequences. 33 Lastly, soft law also is appropriate when it is impossible to specify a precise standard. 34 It offers more effective ways to deal with uncertainty, especially when it initiates processes that allow actors to learn about the impact of agreements over time. 35 In comparison, hard law approaches are relatively inflexible. 36 Hard law cannot be revised or supplemented frequently due to the need for legal certainty. 37 (3) Simplicity and speed. Soft law obeys a logic of 'flexible governance', 38 with the simplicity of formulation and modification procedures. It does not need to be drafted in such a careful manner as hard law, 39 enabling it to meet a need for faster regulation. Due to the less formal adoption process, it can also be less expensive than traditional legislation. In addition, it has been underlined that the simplified adoption procedures for soft law are highly valued characteristics in regulating sensitive sectors in which agreements are very hard to reach, tackling issues of regulatory philosophy and broad policy, and addressing situations where swift action is imperative. 40 Soft law is also useful when there is a need to reach agreements quickly. 41 For example, several soft law instruments were adopted on a contingency basis during the COVID period. 42 However, the establishment of hard law must strictly comply with statutory procedures often including fundamental rights provisions whose structures are generally rigid. 43 The procedures of hard law are formal and complex, which makes it slow to cope with uncertainty and contingency. 32 Ibid, at 15. 33 Ibid, at 31. 34 Ibid, at 31. 35 Abbott, and Snidal, supra note 29, at 423. 36 Ibid, at 453. 37 Jiang M, (2006). '软法的兴起与软法之治 (The rise of soft law and the governance of soft law)', 中 国法学China Legal Science. 33. 38 Weeks G, (2016 In sum, the advantages of soft law satisfy the regulatory requirements in the rapid development of information technology and the digital economy. It is preferred to provide guidance and solutions for complex issues, and solve problems with the diversity and mutability of social relationships and affairs stimulated by digitalization and technology. 44

Two debates on using soft law
Despite the advantages discussed above, the use of soft law still sparks debates.
(1) More participation in law-making? In principle, soft law permits the integration of all interested parties in the process of law-making. Increased openness allows for more active participation of non-state actors, promotes transparency, enhances agenda setting, and facilitates the diffusion of knowledge. 45 Some scholars suggest that the use of soft law can promote social power, 46 as both the formulation and implementation of soft law depend largely on proactive communication and negotiation. 47 However, soft law making may bypass the legislature's involvement and normal accountability systems. 48 It is more natural for the executive arm of government who was increasingly used to power for over a century, to seek to avoid dealing with an obstructive parliament and cumbersome procedures. 49 Thus, there is also a concern for the possible expansion of administrative power, which may lead to the abuse of powers. 50 If, for instance, the European Commission lacks the power to enter into a legally binding commitment, it could instead use soft law to achieve the same result. 51 The European Parliament has criticized that the Commission issued soft law to avoid the legislative procedure through the Parliament and the Council. 52 No conclusions have been drawn about whether the soft law-making procedure increased more interested parties is better or more important than the legislative procedure led by legislatures. 44 Jiang, supra note 37, at 3. 45 Snyder, supra note 15.
See also: Trubek, Cottrell and Nance, supra note 15, at 16. 46 Jiang M, (2014).'改革法治与国家治理现代化 (Reform of the Rule of Law and Modernization of National Hovernance)'. 中共中央党校学报 Journal of the Party School of the Central Committee of the C.P.C, 53. 47 Luo H and Song G, (2006 (2) Promotion of legal certainty? Legal certainty is always believed as one of the intrinsic advantages of hard law. It is, on the whole, wise legal policy to use hard rules as much as possible for regulating human behavior because they are more certain and accessible to the public, at least in theory, and lend themselves more easily to uniform and predictable application. 53 Legal scholarship generally assumes that tightly specified rules increase legal certainty. 54 However, when a more complex and changing phenomenon is being regulated, soft rules can regulate a transitional technology with more certainty than fixed hard rules. 55 For example, Andrew Simpson makes the case that the regulation of international technologies like telecommunications requires flexible rules. What a telephone means today may be something quite different tomorrow. 56 Soft law, likes a stop-gap measure, provides an initial foundation for future legislation to increase legal certainty. 57 Soft law then may represent a first step on the path to legally binding agreements, 58 which functions as a springboard in the development of hard law. 59 Meanwhile, soft law can also be seen as a halfway solution, a non-binding instrument with a guiding role, 60 to help the public to understand hard rules. 61 Thus, soft law instruments are considered to protect legal certainty on complicated issues, especially buttressed by obligatory principles. 62

Disadvantages of soft law
While soft law has drawn increasing attention, it has not received uniform support. 63 In general, soft law has vague legal consequences. It, in principle, has no legally binding force and is not enforced by state coercive power. 64 That was considered as 'fatal' drawback because the enforcement of soft law might be difficult. Despite the fact that soft law may have legal and practical effects and encourage consistency as well as disseminate information, 65 it mainly relies on social coercion or self-discipline mechanisms. 66 For instance, Trubek et al. outline that shaming is one of the ways for EU soft law to affect and change behavior. Member States seek to comply with guidelines to avoid negative criticism in peer review and the Council recommendations. 67 However, hard law takes advantage of its legally binding force in enforcement with coercive power, forcing actors to consider the threat of sanctions. 68 The legal consequences of hard law are certain and clear, which makes it easier for private actors to predict the effects of their behaviors.

The EU and China's choices of different instruments
According to the United Nations Conference on Trade and Development, the goal of policymakers and legislators is to maximize the potential positive impacts of the digital economy, ensuring that these benefits are widely shared and minimizing the negative effects. 69 This section analyzes the EU's choice to adopt hard law and China's choice to adopt soft law from two perspectives. One is to explore the benefits and negative effects for the European and Chinese digital markets. Furthermore, the powers of competition institutions, in particular the function of competition enforcement authorities, are discussed to explain the effectiveness of hard and soft law in two jurisdictions.

The EU's choice of hard law
The 1957 Treaty of Rome first established the European Economic Community's competition regime, which has evolved alongside the unique supranational entity, the EU. 70 Competition law lies at the heart of the EU legal framework for creating and supervising of the Internal Market. Before the challenges of the digital market have come to the fore, the EU competition provisions are mainly contained in Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU) and in the EU Merger Regulation. 71 Competition law is playing an ever-increasing See also, Trubek, Cottrell, and Nance, supra note 15, at 32. 66 Luo, and Song, supra note 47, at 5. 67 Snyder, supra note 15.
See also: Trubek, Cottrell, and Nance, supra note 15, at 21. 68 Ibid. 69 United Nations Conference on Trade and Development, (Geneva 2019). Digital Economy Report 2019: Value Creation and Capture: Implications for Developing Countries. 37. Available from: https:// unctad. org/ webfl yer/ digit al-econo my-report-2019# tab-2. 70 Ezrachi A, (2021). Competition and Antitrust Law: A Very Short Introduction. Oxford University Press. 33. 71 Dunne N, (2015). Competition law and economic regulation making and managing markets. Cambridge University Press. 21. role within the EU, due to the incredibly large fines imposed in the context of the digital market. 72

The European digital market
The digital transformation is one of two large-scale challenges for Europe, along with the green transformation. 73 In the new strategy Shaping Europe's Digital Future launched in February 2020, the Commission voiced its commitment to taking an active role in the digital transformation. By 2030, the cumulative additional GDP contribution of new digital technologies could amount to 2.2. trillion euros in the EU, a 14.1 per cent increase from 2017. 74 The Union has already realized that digital services and products have brought important innovative benefits to the Internal Market.
Three facts can be underlined to distinguish the European digital market from others. Firstly, the European digital market has a cross-border nature. Digital players typically operate across several Member States. Almost 24 per cent of total online trade in Europe is cross-border. 75 Secondly, it is, however, American tech firms that hold the majority of the European market share. Although EU has realized that capturing the full value of the digital transformation requires implementing digital innovation and establishing a strong international position through world-leading digital research and companies, Europe has only attracted 13 per cent of global venture capital and corporate funding to increase spending for digital technologies and AI start-ups. 76 More importantly, Europe is currently dependent on foreign-developed and -owned technology assets for a significant part of its digital economy. 77 For instance, a large number of horizontal search engines offer search services in Germany. 78  https:// www. monop olkom missi on. de/ index. php/ en/ press-relea ses/ 52-compe tition-policy-the-chall engeof-digit al-marke ts. 79 Ibid.
Facebook has taken 80.22 per cent of the social media market share in 2021. 80 At the same time, the Commission explained that over 10,000 online platforms operate in Europe's digital economy, mostly start-ups and smaller businesses (SMEs). 81 SMEs are also negatively impacted by this situation, "as it impedes them from scaling-up and from cross-border expansion, thereby reaching new markets, offering better and diversified products at more competitive prices and, as the case may be, growing into challengers of established players in the digital sector". 82 Thus, DG Competition aims to directly regulate Big Tech companies, also known as gatekeepers, although the Regulatory Scrutiny Board 83 and several scholars argue that the initiative does not fully justify the gatekeepers and selection of the core platform services by DG Competition. 84 Lastly, legal uncertainty is faced by the digital market players. 85 Digital players typically operate at a global scale and deploy global business models. Several Member States have already started introducing new rules to address concerns arising from the presence of challenges. 86 Even those Member States who have not yet adopted legislation are increasingly considering national measures to that effect. 87 Fragmentation is also observable due to differences in the legislations in the internal market. For instance, the circle of potential addresses of the DMA appears to be wider than the Section 19a of German Competition Act, 88 in particular in view of the qualitative criteria, which may trigger a presumption that the firm may be designated as a gatekeeper. 89 As a result, different legislations within the EU may lead to increased regulatory fragmentation and increased compliance costs for these large 80 Website of Statcounter. The last access on 29 March 2022. Available from: https:// gs. statc ounter. com/ search-engine-host-market-share/ all/ europ e/# month ly-202101-202112-bar. 81 European Commission, supra note 75, at 2. 82 Ibid. 83 The Regulatory Scrutiny Board is an independent body within the Commission to provide central quality control and support for Commission impact assessments and evaluations at early stages of the legislative process. Its Opinion was published by the Commission together with other official documents in the website. Available from: https:// ec. europa. eu/ info/ law/ law-making-proce ss/ regul atory-scrut iny-board_ en. 84  market players and the business users that rely on them. 90 Regulatory initiatives by Member States, however, cannot fully address these effects; without action at the EU level, they could lead to a fragmentation of the Internal Market. 91 All these facts attracted the EU's attention. On the one hand, the EU has published several digital strategies to promote innovation of European businesses. As all sectors are on the point of being radically reshaped by the combination of connectivity and data, and digital technology is at the heart of this transformation, Europe may want to reduce its dependency on foreign technology. 92 On the other hand, the Union, under the principle of subsidiarity embodied in Article 5(3)-(4) Treaty of European Union (TEU), believes that competition in the digital market cannot be sufficiently achieved by the Member States by reason of the scale or effects of the proposed action, and can therefore be better achieved at the Union level. 93 Notably, the EU plans to issue new rules to protect fair competition in the Internal Market. The Commission's focus on digitization in general and algorithms, in particular, is evident from a number of speeches by Mrs Vestager. 94 However, what can the Commission do to protect fair competition in the digital economy? The next part will analyze powers of EU competition institutions.

The power of competition institutions
The EU is not a state, but rather a regional integration scheme of sovereign states, and is hence a divided-power system, based on the principle of attributed competences and powers. 95 Two types of power balance need to be analyzed in competition law. On the one hand, the powers at the EU level among the Commission, the Parliament, the Council and the Court of Justice of the European Union (ECJ). On the other hand, the powers between the EU and the Member States, such as the Commission and the national competition authorities (NCAs). legislators, competition authorities and judicature aspects in the fields of competition law.

Powers at the EU level
(1) Legislators. According to Article 14(1) TEU, the Parliament shall, jointly with the Council, exercise legislative power in the EU. The Ordinary Legislative Procedure in Article 294 TFEU asks the Commission to submit the proposal to the Parliament and the Council. Then the Parliament and the Council shall adopt their positions at three readings and communicate them to the Commission. The emphasis throughout the procedure is on compromise and dialogue to facilitate the successful passage of the legislative act. 97 Furthermore, in the area of competition law, Article 103 TFEU provides that the Council must, after receiving a proposal from the Commission and consulting the Parliament, lay down the appropriate legislation to give effect to the principles set out in Articles 101 and 102 TFEU. 98 The Council has adopted several pieces of legislation that are paramount in EU competition law. 99 (2) Competition authority. The Commission plays a leading role in developing and enforcing EU competition law. 100 Above all, the Commission has the power to prosecute cases and to adopt decisions requiring the termination of infringements of the rules on competition and imposing fines. 101 Article 17(1) TEU stipulates that the Commission shall ensure the application of the Treaties and measures adopted by the institutions pursuant to them. It shall exercise coordinating, executive and management functions laid down in the Treaties. More importantly, Article 105 TFEU highlights that the Commission shall ensure the application of the principle laid down in Articles 101 and 102. In addition to its power to deal with individual cases, the Commission also acts to develop a given practice on its own initiative by issuing soft law, 102 such as notices and guidelines. These soft approaches indeed have self-binding effects to limit the Commission's discretion. 103 (3) Judicature. Article 19(1) TEU states that the ECJ shall ensure that the law is observed in the interpretation and application of the Treaties. Although several 97  pieces of research were conducted to show soft law has been taken into consideration in concrete cases, 104 there is no obligation for the ECJ to apply soft law. Furthermore, Article 263 TFEU stresses that the ECJ shall review the legality of legislative acts, of acts of the Council, of the Commission, other than recommendations and opinions, and acts of the Parliament and of the Council intended to produce legal effect vis-à-vis third parties. Under the Article, the ECJ has jurisdiction to supervise the legal acts and considers that competition institutions in question must not exceed its power. 105 But there is no requirement for reviewing soft law instruments and indeed the case law has been very restrictive when it comes to judicially reviewing EU soft law measures. 106

Powers between the EU and member states
When Regulation 17 was adopted in 1962, 107 it was decided that the Commission should become the central competition authority in the Community (now Union). Since 1 May 2004, the system of centralized notification and prior authorization by the Commission under Article 101 TFEU was abolished. 108 Regulation 1/2003 delegated competition enforcement power to NCAs and national courts in order to relieve the Commission of its increasing administrative burden and make enforcement more effective. 109 More importantly, Regulation 1/2003 increased the necessity for adopting more soft law instruments. 110 Commission-initiated soft law supposedly diminishes the threat to consistent enforcement resulting from multi-level setting. This makes soft law indispensable for national enforcers, especially where formal Commission decisions do not sufficiently inform national decisional practice. 111 The viability of the enforcement regime proposed in the Regulation on Procedure depends on close cooperation and coordination between NCAs and the 104 For example, Senden, supra note 103, at 361; See also Stefan O, (2008), 'European Competition Soft Law in European Courts: A Matter of Hard Principles', Vol. 14. European Law Journal, 753-772. 105 Chalmers, Davies, and Monti, supra note 96, at 368-369. 106 Eliantonio M, (2020 Commission. 112 Because NCAs are bound by Commission decisions which should incorporate the more economic reasoning of the guidelines, they are most likely also going to adopt a more economic reasoning. 113 Besides, national courts have 'an essential part to play' in applying the competition rules. 114 The role of the national courts has become more prominent in recent years as a result of their ability to award damages for breaches of Articles 101 and 102 TFEU, both for breaches established by a prior finding of a competition authority (including the Commission) and for breaches first established by the national court. 115 However, the national courts' attitudes to soft law are different. Some would like to take soft law into account, 116 while some take a vague attitude. 117 In fact, national courts could stray away from the guidelines because more economic soft law is not necessarily aligned with the case law of the supranational courts, which jurisprudence national courts are obliged to follow. 118 If this scenario comes to fruition, NCA decisions would not be upheld on appeal. 119

Analysis
Hard law would be better for competition institutions to act in accordance with the power conferred by the Treaties, to secure the institutional balance and guarantee democracy within the EU. 120 In contrast, soft law issued by the Commission may avoid of the participation of the Parliament and the Council, and not be applied indirectly by the ECJ. On the other hand, Member States may also prefer to apply hard law. The powers of the Union are conferred by the Treaties agreed with all Member States. As the Treaties clarifies that soft instruments are of non-legally binding force, the NCAs and national courts would not be responsible for enforcing them like hard law. The legal practices showing different attitudes to soft law enforcement 112 Wiggers, Struijlaart, and Dibbits, supra note 98, at 18. 113 Georgieva, supra note 111, at 22. 114 Whish R, and Bailey D, (2021), Competition Law, 10th ed. Section 2 Oxford University Press, 57. 115 Ibid. 116 For example, the research of Eliantonio and Alberti illustrates that Italian national courts make frequent use of EU soft law and endow it with binding effects in some policy fields, such as competition and State aid.
See from Alberti J, and Eliantonio M, (2021 by NCAs and national courts in different Member States, could also prove that the enforcement of hard law is more effective than soft law in the EU. Thus, if the goal is to promote an internal digital market in the EU, harmonization (of the regulation aimed at tech firms) via hard law seems the most appropriate choice for the EU. Indeed, the EU recently published the P2B Regulation and the DMA. In its DMA Proposal, the Commission stressed that: Only a legislative instrument can effective address the problems identified. A Regulation is in addition necessary, as it is directly applicable in Member States, establishes the same level of rights and obligations for private parties, and enables the coherent and effective application of rules in the inherently cross-border online intermediated trade generated in the online platform economy. 121 Additionally, in order to promote flexibility of hard law to respond to the rapid development of digitalization and technology, the EU added the review articles. For instance, Articles 4 (2) and 53 asks the Commission to review and evaluate the effectiveness and efficiency of measures every three years, to ensure that the DMA remains up to date and constitutes an effective and holistic regulatory response to the problems posed by gatekeepers. 122

China's choice of soft law
The Chinese law-makers believe that competition law is a crucial component of a legal system required to support the functioning of a market economy. 123 They understood that competition law would help to establish competitive market structures, promote and ensure efficiency of economic development. 124 Indeed, while competition law intervenes only when there is a market failure, the competition agencies sometimes leveraged the law as a tool to fulfil its mission to maintain market stability. 125 121 European Commission, supra note 75, at 5.

The Chinese digital market
China possesses one of the world's largest and most vibrant digital economies. 126 While overall digitalization is still lagging behind advanced economies, China has emerged as a global leader in key industries. 127 Furthermore, China has experienced rapid digitalization in recent years. The size of the digital economy has surged from 15 per cent of GDP in 2008 to 33 per cent in 2017, mainly driven by the integration of ICT with traditional sectors. 128 In fact, the Chinese government has already realized the significant role of digitalization and technology in developing the economy. According to the 14th Five-Year National Information Plan published by the Chinese Cyberspace Administration on 27 December 2021, 129 China's digital economy ranks second in the world. Leading digital platforms from China-namely Alibaba, Baidu and Tencent-also benefited, experiencing altogether a net income increase of 37 per cent, from almost $20 billion in 2017 to $27 billion in 2019. The increase in profits was even more remarkable in 2020, as the cumulative net income was approximately $48 billion, a rise of 78 per cent compared with 2019. 130 Last but not least, the Chinese digital market is dominated by native tech firms. For instance, Baidu took over 78 per cent of the market share in the search engine market. 131 However, some cases have emerged in China in a few years, such as 'choose one from two' between Alibaba and Pinduoduo, 132 and algorithmic price discrimination cases of several travelling platforms. 133 These cases have triggered massive public concerns and posed a threat to social stability. Since 2020, the Chinese government's attitudes to the platform economy have changed from 'tolerant and cautious' to 'harshness', which greatly influences China's regulatory process in competition law. 134 Several significant central-level conferences have proposed strengthening competition regulations and resolutely opposing monopolistic behaviors. The Politburo meeting held on 11 December 2020 called for strengthening anti-monopoly 126 Zhang H, (2022), 'Agility Over Stability: China's Great Reversal in Regulating the Platform Economy', Harvard International Law Journal, 4. Available from: https:// papers. ssrn. com/ sol3/ papers. cfm? abstr act_ id= 38926 42. 127 Zhang, and Chen, supra note 1, at 4. 128  and preventing the disorderly expansion of capital. 135 The Central Economic Work Conference on 16 December 2020 listed strengthening anti-monopoly as one of the eight critical risks in economic work in 2021. 136 All these facts point to the conclusion that the Chinese government was keen to adopt rules to deal with new issues in the digital market and rapidly cope with problems to maintain social stability. But how does government achieve these goals?

The power of competition institutions
China is a big, complex country with a highly centralized system of government. 137 The powers of competition institutions can also be understood from three aspects: legislators, competition authorities and judicature.
First of all, the powers and responsibilities of state institutions are prescribed by Chapter 3 of the Constitution. Article 58 states that the National People's Congress (NPC) and its Standing Committee exercise the legislative power of the State. 138 Article 85 prescribes that the State Council is the Central People's Government and the executive organ of the highest state organ of power. It is the highest state administrative organ. Furthermore, Section 8 prescribes that the People's Courts shall be responsible for the adjudicatory work. Based on China's Constitution, the three powers of legislation, administration, and judicatory seem balanced and independent.
However, Article 9 of the Chinese Legislation Law also prescribes that the NPC and its Standing Committee can decide to authorize the State Council to formulate hard law named 'administrative regulations '. 139 According to this Article, the State Council has the administrative power to supervise digital markets, and has the legislative power delegated by the NPC and its Standing Committee. Similarly, a department of the State Council-the State Administration for Market Regulation (SAMR), 140 can issue hard law named 'rules'. Lastly, the State Council and the 135 Dong J, (14 December 2020 Except for the affairs concerning criminal offences and their punishment, mandatory measures and penalties involving deprivation of citizens of their political rights or restriction of the freedom of their person, and the judicial system. 140 And the new department: State Anti-Monopoly Bureau (SAMB). SAMR can also issue soft law instruments and apply these competition rules to individual cases.

Analysis
Based on the above, on the one hand, it is obvious that central competition authorities, the State Council and the SAMR, can issue both hard and soft law to regulate competition in the digital market. However, because the Chinese government has needed to rapidly cope with new problems to maintain social stability, soft law has been considered to be a better choice, in order to quickly respond to issues triggering massive public attention. As the Anti-Monopoly Commission of the State Council stressed in the Explanation of the Guidelines: "The aims of the Guideline are to promote innovation, highlight problem-orientation and respond to public concerns". 141 On the other hand, Chinese competition authorities have both legislative and administrative powers. Due to the strong power of competition authorities, businesses cannot ignore soft instruments and believe they do not affect them. Therefore, China officially published the Platform Guidelines in February 2021. Since then, the SAMR made punishment decisions for ninety-two cases in the Internet sectors between March and December 2021. 142 Besides, the SAMR and other three departments have published a hard law instrument named the Provisions on the Administration of Algorithm Recommendations for Internet Information Services, 143 which has some provisions related to fair competition. However, it is out of scope of this paper, because it aims at regulating specific technology and not (or only indirectly) at assessing behaviors of tech firms under competition law.
Additionally, China has established the State Anti-Monopoly Bureau (SAMB) on 18 November 2021 to strengthen the power of competition authority and promote law enforcement. Wang Yong, head of the Anti-Monopoly Commission of the State Council, called on the Bureau to further implement the fair competition policies, and strengthen supervision and law enforcement in areas involving the platform economy and innovation of science and technology. 144 In fact, it was SAMR's anti-monopoly department that has been elevated to the deputy ministerial-level SAMB. The higher-ranking authority could assist antitrust investigators in receiving resources when investigating cases. Additionally, we assume that the establishment of SAMB could increase its influence on private sectors, and then promote the effectiveness of soft law enforcement. However, the effects of strengthening the competition authority's power still need to be assessed.

Comparing the choices of the EU and China
After reviewing the EU and China's choice of regulatory tools, this part compares the EU and China's choices from two aspects.

Different conflicts and aims for regulating
The EU and China face problems that are not entirely the same in the digital market. Both the EU and China realized the importance of innovation and dynamic competition in developing the digital economy, which influenced their respective competition laws and policies. However, the Chinese digital market is dominated by native tech companies, while the European market is dominated by non-native companies from the US. That significant difference must influence their attitudes and aims towards Big Tech firms and regulations.
The EU aims to harmonize its policy aimed at digital markets and to promote European businesses. EU regards competition issues in the digital market as having an intrinsically cross-border nature. The Commission argued that regulatory initiatives by Member States could not fully address those challenges and effects; without action at the EU level, they could lead to a fragmentation of the Internal Market. 145 More importantly, the conflict between promoting the European digital businesses and domination by international tech firms might lead to tough measures taken by the EU. For example, US critics particularly charge European regulators with attempting to institute a regime of economic protectionism that would give European businesses an unfair advantage. 146 Some researchers also criticize that the EU overlooked the economic evidence that favors large platforms, and the DMA reveals a positive bias toward European SMEs. 147 Based on the DMA, it is obvious that the Commission pays attention to the large platforms called 'gatekeepers'. Without a doubt, these well-identified firms are just a handful of corporations, mostly American and Chinese. 148 However, China is a state with a unified market. The Chinese government recognizes social stability as a top priority. When serious cases triggered massive public attention to the digital market, the State Council and SAMR rapidly took measures to deal with cases and quickly issued rules for guiding the native platform operators.
Further, one of the major objectives of China is to set global standards and datarelated technologies, the same as the US, due to their technological dominance. 149 Although the Chinese government realized the importance of competition regulation to social stability, the main concern is that regulatory burdens are often perceived as a major obstacle to innovation. Thus, the main issue faced by the Chinese government would be how to balance the competition and innovation between native tech companies.

Different power design of competition institutions
The competition institutions of the EU and China are essentially different. China is a state, while the EU is a supranational organization.
With a highly centralized system of government, hierarchical control plays a decisive role in China. 150 The powers of the State Council and SAMR are conferred by the Constitution. Consistent enforcement of soft law by local competition authorities would not be a concern for China. 151 In contrast, the EU's powers were conferred by the Treaties agreed by all Member States. When Article 288 TFEU clarified that recommendations and opinions have no binding force, both the Courts and NCAs have no obligation to apply or directly apply soft law. Thus, the principles of legal certainty and consistency may be undermined by soft law's uncertain workings in national legal orders-the legal vis-à-vis practical effects that those instruments generate are far from clear. 152 Furthermore, Chinese competition authorities have both legislative and administrative powers to issue hard and soft laws, and then enforce their rules. In contrast, the Commission does not have legislative power, meaning it can only issue soft law, besides its important task of enforcing all rules. Obviously, Chinese competition authorities may enjoy stronger power and more room than the EU, leading Chinese competition authorities to have more approaches to influence tech firms when applying their rules. For instance, the Chinese central authority maintains extensive administrative discretionary power and is able to strategically leverage state media to influence firms under investigation. 153 It is hard to imagine that private firms ignore soft law issued by Chinese competition authorities. Although some scholars criticize that the Commission is becoming more and more powerful nowadays, the Commission still cannot issue hard law by itself. 149 United Nations Conference on Trade and Development, supra note 3, at 113. 150 Wang, supra note 137, at 337. 151 For example, Beijing competition authority published "北京市平台经济领域反垄断合规指引 (Anti-monopoly compliance guidelines in the field of platform economy in Beijing)"in 2021, based on the Guideline issued by central competition authority. (in Chinese). Available from: http:// scjgj. beiji ng. gov. cn/ zwxx/ scjgdt/ 202112/ t2021 1209_ 25570 26. html. 152 Georgieva, supra note 111, at 8. 153 Zhang, supra note 125, at 79.

Conclusions
Are there reasons for competition regulators to choose different legal instruments between hard and soft law? On the basis of the fact that the EU published two hard law instruments (the P2B Regulation and the DMA) while China published a soft law instrument (the Platform Guidelines) for the similar issue of fair competition in digital markets, this paper provides two main reasons that may be considered by regulators for using the different tools.
Firstly, the characteristics of digital markets show that the EU and China indeed face the not exactly the same challenges, which may influence their strategies in competition law and policies. The EU faces the cross-border nature of digital markets dominated by international tech firms and the regulatory fragmentation in the internal market, causing legal uncertainty. However, the Chinese digital market is dominated by native tech firms, which brought problems and triggered public concerns.
Secondly, the different power design of competition institutions shows that the Chinese competition authorities may have stronger powers and more rooms to influence tech firms compared to the Commission, because the Chinese competition authorities can issue both hard and soft law approaches while the Commission can only publish soft law.
Nevertheless, the findings of this article go beyond the reasons for the EU and China's choices based on the pros and cons analysis of soft and hard law instruments. In light of the comparative analysis, this paper also explores the appropriateness of their different choices. We conclude that both the EU and China have made use of the advantages of soft or hard law while finding their ways to overcome the disadvantages.
On the one hand, if the EU want to protect its Internal Market from abusive practices by Big Tech firms, it seems the most appropriate to introduce hard law instruments at the EU level which directly apply in all Member States. Meanwhile, it is wise to add review articles to overcome inflexibility. However, the effects of the regular review still need to be assessed in practice to see whether it is flexible enough to cope with the issues in the digital market.
On the other hand, China has been able to take advantage of soft law to rapidly respond to public concerns and maintain social stability. Moreover, it has used the power of competition authorities to publish soft law and use it to guide and influence the behaviors of private firms. However, it is necessary to examine whether it is lawful and effective in promoting law enforcement by strengthening administrative power.
This paper does not suggest that hard law is better than soft law or the opposite. Indeed, a hybrid system with both hard and soft law is common in most legal regimes. However, the experience of China and the EU do suggest that the differences between the two regulatory tools should be known and considered during the legislative and policy-making processes.
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